Especially in the case of wood chips, manufacturers of wood-based materials and pellet producers have not yet reached agreements with all suppliers. These agreements are expected to be finalized by mid-January. It is reasonable to expect that developments in the pellet market over the past few days and weeks will continue to impact price levels.
Sawdust prices continue to their upward trend
Contracts concluded before the Christmas break show price increases of €5 to €10/t for dry sawdust compared to early December and to fourth-quarter prices. Pellet mills, in particular, accept the prices demanded by the sawmill industry. Non-integrated pellet mills pay €140 to €150/t ex sawmill for dry sawdust. Some prices are even higher than that. Wood-based materials manufacturers have further reduced the use of sawdust due to high prices. The prices paid by this sector range from €120 to €135/t ex sawmill. For some manufacturers, the increases are not the result of negotiations but rather stem from index-linked contracts of other companies that were rejected. In addition to index-linked contracts, which take the pellet price trend into account, among other things, monthly graduated prices can also be found in contracts for sawdust deliveries to the wood-based materials industry. Anticipating high demand from pellet mills in January, manufacturers of wood-based materials have adjusted to this price level. However, by the end of March, purchase prices will be gradually reduced to below €120/t ex sawmill for dry sawdust, since deliveries to the pellet industry are expected to decrease.
Withdrawal of the wood-based materials industry
Already in the second half of 2025, many producers of wood-based materials found wood chip prices too high. The share of sawmill byproducts in chipboard production is often below 20%. One Austrian manufacturer even reported not using any wood chips at all at the moment. In the wood-based materials industry, mobile chippers for the processing of industrial wood are also in use at almost all lumberyards.
At one chipboard plant, production was shut down over the Christmas holidays, as usual. At another company, production was stopped on one line due to market conditions. The remaining chipboard manufacturers were able to fully utilize their capacities and kept producing throughout the holidays. Several Austrian chipboard plants are also benefiting from growing demand, which is partly driven by new or updated collections, to a lesser extent, and partly by extended shutdowns at competitors in neighboring countries, including Germany, due to market conditions.
Pellet production is running at a high level, as in previous months. The current temperatures have limited drying at some plants. Most finished goods warehouses are empty. Inquiries from fuel dealers increased significantly in January. Often, however, only partial deliveries can be guaranteed. This is also true for bagged pellets that are to be delivered to Italy. Expecting prices to fall, resellers there purchased pellets only hesitantly and now have insufficient stock levels.
Pellets €10 to €15/t more expensive
In Austria, pellet prices for retailers and bulk buyers range from €280 to just under €300/t ex-works. The price gap between western Austria and producers in eastern and southern Austria has narrowed somewhat. Despite the increase, a price difference remains compared to German prices, which companies located near the border use to their advantage. Market participants report prices up to €320/t ex works for bagged pellets.
Wood chips still cheaper than sawdust
At €120 to €140/t ex sawmill, prices for dry wood chips will increase in the first quarter, but remain below those for sawdust. In some cases, sawmills report that pulp producers are paying much higher prices for wood chips. However, this has not been confirmed by buyers. Market participants consider short-term replacement purchases or strategic supply agreements with sawmills located in convenient freight locations to be possible. Competition between pulp and pellet mills over supply continues to drive up prices.
Pulp mills with stable demand for wood
The pellet industry is expected to experience its usual seasonal decrease in demand over the coming months. Demand from the pulp industry, on the other hand, remains unchanged compared to 2024 and 2025. At the end of last year, pulp production in Austria was forecast to decrease in 2026. However, given the persistently difficult market situation for Scandinavian and European paper and pulp mills, production adjustments in Austria are possible later this year.
Wood chip stock levels decreased over the holidays
During the 2025/26 holidays, Austrian sawmills were shut down longer than the long-term average. Many sawmills stopped cutting several days before December 19. Medium-sized companies, in particular, only restarted production on January 12. As a result, wood chip inventories at pulp mills decreased substantially. They did not reach critical lows in most mills, though.
An increase in the supply of wood chips is expected in the coming weeks. During the Christmas period, many private forest owners took advantage of the favorable weather and harvested and transported log wood. Until a few days ago, it was assumed that log supply to the sawmill industry would improve rapidly. However, recent snowfall has cast doubt.
